{"id":4704,"date":"2025-05-16T02:41:26","date_gmt":"2025-05-16T02:41:26","guid":{"rendered":"https:\/\/cred-iq.com\/blog\/?p=4704"},"modified":"2025-05-16T02:41:28","modified_gmt":"2025-05-16T02:41:28","slug":"cre-clo-distress-rates-drop-by-410-bps-while-originations-soar","status":"publish","type":"post","link":"https:\/\/cred-iq.com\/blog\/2025\/05\/16\/cre-clo-distress-rates-drop-by-410-bps-while-originations-soar\/","title":{"rendered":"CRE CLO Distress Rates Drop by 410 BPS While Originations Soar"},"content":{"rendered":"\n<p>The commercial real estate collateralized loan obligation (CRE CLO) market offers lenders flexibility and investors exposure to diversified real estate debt. As interest rates elevated the sector experienced notable shifts in loan performance. But are those trends now reversing?&nbsp; Let\u2019s dig into the numbers.&nbsp;&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-16018d1d wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-round\"><a class=\"wp-block-button__link has-white-color has-vivid-cyan-blue-background-color has-text-color has-background has-link-color wp-element-button\" href=\"https:\/\/pages.cred-iq.com\/trialrequest\">Access CRE CLO Loan &amp; Financial Data<\/a><\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<p>CRED iQ\u2019s latest report on the April results reveal some encouraging trends.&nbsp; Our overall distress rate notched a 410-basis point decline, the largest such favorable move in over a year.&nbsp; The CRE CLO distress rate now stands at 10.3%.&nbsp;&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"960\" height=\"960\" src=\"https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Rates-3.png\" alt=\"\" class=\"wp-image-4705\" srcset=\"https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Rates-3.png 960w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Rates-3-150x150.png 150w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Rates-3-300x300.png 300w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Rates-3-768x768.png 768w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Rates-3-696x696.png 696w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Rates-3-420x420.png 420w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><\/figure>\n\n\n\n<p>Similarly, the underlying metrics saw meaningful declines as well.&nbsp; Our delinquency rate dropped 220 basis points to 9.7% and special servicing shaved 110 BPS landing at 7.4%<\/p>\n\n\n\n<p><strong>Is CRE CLO Getting Hot?<\/strong><\/p>\n\n\n\n<p>Our research team widened the aperture a bit to examine the velocity of the CRE CLO sector over the past year. Here are some metrics from our study:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Total year-to-date CRE CLO issuance totals $11.4 billion, which includes Invesco&#8217;s first CLO deal that totaled $1.2 billion\n<ul class=\"wp-block-list\">\n<li>Also notable TPG&#8217;s $1.1 billion managed CRE CLO deal, of which $962 million was rated investment grade.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p>As a comparison, during the first four months in 2024,&nbsp; CRE CLO volume only totaled $2.2 billion, meaning CRE CLO issuance velocities have increased 400% when compared to last year. Indeed, it could be argued that CRE CLO is already hot!<\/p>\n\n\n\n<p><strong>Payment Status<\/strong><\/p>\n\n\n\n<p>While these improvements are encouraging, the broader picture reveals ongoing challenges. 63.1% of CRE CLO loans have surpassed their maturity date (down from 69.5% last month).&nbsp; 36.6% are classified as \u201cperforming matured \u2013down from 37.3%.&nbsp; This suggests that many borrowers are exercising extension options or negotiating month-to-month arrangements to avoid default.<\/p>\n\n\n\n<p><strong>Current Loans: <\/strong>16.8% of loans were current (up from 15% in last month\u2019s print).<\/p>\n\n\n\n<p><strong>Non-Performing Matured Loans: <\/strong>Represent 36.6% of CRE CLO loans&nbsp; (up from 32.2% last month)<\/p>\n\n\n\n<p><strong>Delinquent Loans (Pre-Maturity): <\/strong>Account for 15.7% of CRE CLO Loans (a jump up from 13.1% last month).<\/p>\n\n\n\n<p>These figures reflect a market grappling with the aftermath of loans originated in 2021, when cap rates were compressed, valuations were elevated, and interest rates were historically low. Many of these loans, structured with floating rates and three-year terms, are now hitting maturity walls in a dramatically different economic environment.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"960\" height=\"960\" src=\"https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Loan-Payment-Status-1.png\" alt=\"\" class=\"wp-image-4707\" srcset=\"https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Loan-Payment-Status-1.png 960w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Loan-Payment-Status-1-150x150.png 150w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Loan-Payment-Status-1-300x300.png 300w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Loan-Payment-Status-1-768x768.png 768w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Loan-Payment-Status-1-696x696.png 696w, https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2025\/05\/CRED-iQ-CMBS-CRE-CLO-Distressed-Loan-Payment-Status-1-420x420.png 420w\" sizes=\"auto, (max-width: 960px) 100vw, 960px\" \/><\/figure>\n\n\n\n<p><strong>Case Study: Haven at Bellaire<\/strong><\/p>\n\n\n\n<p>A real-world example illustrates the pressures facing CRE CLO borrowers. The $46.3 million Haven at Bellaire loan, backed by a 384-unit multifamily property in the Houston market, highlights maturity-related challenges. Set to mature in April 2025, the loan included two, one-year extension options at origination. The loan was added to the servicer\u2019s watchlist in November 2024 due to pending loan maturity and transitioned to performing mature status in April 2025.<\/p>\n\n\n\n<p><strong>About CRED iQ<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/cred-iq.com\/about\">CRED iQ<\/a>&nbsp;is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.<\/p>\n\n\n\n<p>With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ\u2019s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The commercial real estate collateralized loan obligation (CRE CLO) market offers lenders flexibility and investors exposure to diversified real estate debt. As interest rates elevated the sector experienced notable shifts in loan performance. But are those trends now reversing?&nbsp; Let\u2019s dig into the numbers.&nbsp;&nbsp; CRED iQ\u2019s latest report on the April results reveal some encouraging [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":4706,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[13,9],"tags":[4,5],"class_list":{"0":"post-4704","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-cmbs-delinquency-report","8":"category-research","9":"tag-cmbs","10":"tag-commercial-real-estate-data"},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts\/4704","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/comments?post=4704"}],"version-history":[{"count":2,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts\/4704\/revisions"}],"predecessor-version":[{"id":4709,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/posts\/4704\/revisions\/4709"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/media\/4706"}],"wp:attachment":[{"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/media?parent=4704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/categories?post=4704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cred-iq.com\/blog\/wp-json\/wp\/v2\/tags?post=4704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}